Divorce and Pension Sharing
Divorce and Pension Sharing
What to do when a spouse does not engage
For most divorcing couples, once financial settlement terms have been mutually agreed and set down in a sealed financial order by the Court, the final step in the process is to implement the terms so marital assets can be divided and a clean break between the spouses can come into effect. This can involve solicitors who may be required to transfer or sell a property, or financial advisors who are required to assist with the division of pension benefits between the spouses.
Sadly, there are times when the case does not go as smoothly as that . A recent case of AP v TP (Pension Enforcement) [2025] EWFC 190 (B) highlights this all too well. The parties were married in March 2015 and separated in February 2020. The Decree Nisi was granted in November 2020. At that stage the Applicant Husband (H) was aged 68 and the Respondent Wife (W) was 46. There were two children of the family (although not the biological children of the Applicant) who were aged 17 and 23. The agreement that was reached occurred after the parties had attended an FDR hearing and they had also had the benefit of a Pensions On Divorce Expert (PODE) report. The net equity in the family home was £675,000 (held jointly) and H had a further £108,000 capital and W has a further £77,000. H also held pensions with total cash equivalents of £373,000 (the Aviva pension being in the region of £193,000) as against the £8,270 held by W. H’s income was stated as £3,869 per month. W was in receipt of child support in the sum of £266 per month.
There was a note setting out the position of the parties stating, “Both parties are imminently due an inheritance. The Applicant’s inheritance is expected to be in the region of £220,000 and the Respondent’s is expected to be in the region of £250,000.” It was added that, “The financial settlement meets both parties future housing needs when considering the substantial inheritances both parties are to receive shortly” and “The husband is imminently due to retire and will be reliant upon pension income. The wife is in receipt of state benefits and will obtain employment in the future should her health permit her to do so.”
The Order which was agreed through solicitors on both sides and approved by the Court was for the former family home to be sold with the net proceeds of sale being divided as to 47% to H and 53% W. There was also a 48.94% Pension Sharing Order (PSO) in relation to H’s Aviva pension. The final Consent Order was approved on 6th April 2023. W then failed to engage with H or his solicitors (she sacked her own) and did not provide any of the necessary details or completed forms to Aviva to allow for the PSO to be implemented. This has caused significant financial disruption to H who, 2 years on from when the PSO was first made, is now 70 and wanting to retire. He cannot access any of the funds in his Aviva pension because it is Aviva’s policy that once they are aware that a PSO has been made by the Court, they lockdown the plan.
This means that they will not allow: –
- The payment of benefits to commence including the payment of a tax free cash sum
- For a plan that is already in payment any further payments to be taken
- Transfer of the plan to an alternative pension provider
- Any switching of investment funds
- Any further payments into the plan
These restrictions remain in place until the implementation of the PSO has been completed.
In cases of non-engagement of a party it is always important for the Court to be satisfied that the non-engaging party does in fact have notice of the proceedings as otherwise their failure to comply with orders or attend hearings may not be deliberate. In this case, the judge found that H had gone to extraordinary lengths to ensure that W was fully on notice of all that had occurred and there was no evidence to support any vulnerability of W. This is a case in which the judge was satisfied that the Respondent simply refused to engage with the proceedings, although the motivation for this is not known.
The Court explored the options available to deal with this situation. Originally H was looking to have the PSO varied so the percentage figure could be changed to 0%. This would then free up Aviva to grant H access to his pension benefits. Unfortunately, in this case the Court found it had no power to vary the PSO because the parties were already divorce. Their Decree Absolute was pronounced in 2021. Instead, the Court decided to make an Order that the PSO should be set aside. However, the Court has given W one final opportunity to engage with the process and complete the necessary paperwork for Aviva as well as highlighting to W that if she fails to engage with this one final attempt, she stands to lose approximately £94,000 in pension benefits. It remains to be seen whether W will now engage with the process.
What this situation demonstrates is the need for both parties to take legal and financial advice at the earliest opportunity, and continue to work with those professionals throughout the case to make sure all marital assets are dealt with fully. At Kerseys Solicitors our experienced family solicitors are focused on building a team of advisors tailored to the individual needs of each client. We work alongside a number of financial advisors so both legal and financial aspects are covered. To find out more about this and our initial consultation process, contact our family law team today at:-
Kerseys Solicitors in Ipswich at [email protected] or telephone 01473 213311
Kerseys Solicitors in Felixstowe at [email protected] or telephone 01394 834557
Kerseys Solicitors in Woodbridge at [email protected] or telephone 01394 813732
Kerseys Solicitors in Colchester at [email protected] or telephone 01206 584584
